The U.S. trade deficit widened sharply in October as exports weakened following a summer surge, and imports jumped, setting up a likely drag on overall economic growth in the final months of 2016.
The trade gap for goods and services surged 17.8% from a month earlier to a seasonally adjusted $42.6 billion in October, the Commerce Department said Tuesday. That was the steepest one-month rise since March 2015, and took the deficit to its highest level since June. Economists had expected an October trade gap of $42.1 billion.
Looking ahead, “I would expect the trade deficit to widen next year, as solid domestic demand will boost imports and a renewed appreciation in the dollar will limit the strength in exports,” Amherst Pierpont Securities chief economist Stephen Stanley said in a note to clients.
Exports fell 1.8% from September, the largest drop since January, and imports rose 1.3% in October. The fall in exports included declining shipments of soybeans, corn and consumer goods while the import rise included stronger domestic demand for foreign-made pharmaceuticals, cellphones and capital goods.
On a non-seasonally adjusted basis, imports from China and Mexico hit their highest levels in a year. Exports to China were the most since December 2013 and exports to Japan were at the highest level since August 2014.
The value of petroleum imports, seasonally adjusted, was the highest in 13 months as oil prices marched higher. On a non-seasonally adjusted basis, the U.S. in October imported a daily average of 7.3 million barrels of crude oil, down from 7.9 million a day in September but at a higher per-unit price of $40.01 in October versus $39.02 in September.
U.S. trade gap surged 17.8% in October as exports weakened, imports jumped
December 6, 2016 by Leave a Comment